Is Fab.com the Future of Social Shopping?

How design-focused e-commerce brand grew to $200,000 in daily sales in just six months.

Fab.com has racked up some impressive stats since repositioning itself just six months ago from what founder and CEO Jason Goldberg calls "a 'Yelp' for gay men."

The small, design-focused e-commerce brand is backed by more than $51 million, has nearly 1.5 million members, and averages $200,000 in daily sales.

The rapid turnaround is due in part to Fab's social inclinations - "We're going to take social shopping to the extreme," Goldberg recently blogged - and its eagerness to please the design enthusiasts that make up its member base.

Fab.com offers daily design inspirations and sales of products up to 70 percent off retail, as well as longer sales through its shops. Membership is free, but numbers are restricted to maintain pricing.

Members receive a daily email or app notification at 11 A.M. ET that shows the day's new products for sale. The sales from each email are available for 72 hours because the company has negotiated rates with designers and suppliers. It sells everything from home products to jewelry, artwork, apparel, workplace items, toys and outdoor products. The common denominator is good design.

Goldberg notes the company can target a broad audience because it offers a broad range of prices. "The beauty of selling 'design' is that we can offer $2 products and $2,000 products in the same email," Goldberg said.

In addition to daily sales, Fab.com offers longer-term sales through a revolving set of online "shops," accessible from a tab at the top of the site. Each of these has an overarching theme with sales that last from 15 to 45 days. Previous shops include a Made in America Furniture Shop and a T-Shirt Shop curated by investor Ashton Kutcher.

"When people look for books online, the first place they think of is Amazon.com. When people look for shoes online, they're likely to visit Zappos. And when people think design, we want them to go to Fab.com," said Goldberg.

Social by Design

Social discovery is at the core of Fab's marketing strategy. The company makes it extremely easy for users to share products with friends on Facebook, Twitter and Tumblr. Goldberg says more than half of its members have joined via social sharing.

On December 16, Fab.com introduced its Live Feed, allowing members to view and interact with what's happening on the site in real time, including purchasing, sharing and commenting. Users have the option of revealing their usernames when they interact with the site or appearing as "A Fab User."

"Because our goal is to inspire people and make them smile, we've seen that they naturally want to share with others when they've found something that's made them laugh or discovered a really neat product that's a perfect fit for themselves or as a gift," Goldberg says.

In a blog post announcing Live Feed's launch, Goldberg wrote, "We're hopeful that this will increase engagement on Fab even further and explode sharing on/off Fab, even more than we already see today."

An Early Pivot

The company was founded in February 2010 as Fabulis, but Goldberg and co-founder Bradford Shellhammer weren't satisfied with its early traction. They shut it down a year later. Leaning on a mutual love of design, they decided to switch gears and, as Goldberg describes it, "set out to create the most beautiful, fun and inspiring e-commerce site in the world."

Fab.com launched as a one-stop virtual design shop in June 2011.

"We saw a demand for selling fun and unique products related to design," Goldberg says. "Our buying team, led by [Shellhammer], is out there scouring the globe for the coolest products available. They are commissioned with one and only one task: find products that make you smile. We believe that if we can inspire and delight ourselves with the products, we'll surely inspire and delight others."

Goldberg also says it's the discovery process that makes Fab.com appealing to consumers. "Our site and apps are [aesthetically pleasing] and easy to navigate and members can purchase with just a few clicks."

As of December 2011, Fab.com was backed by $51 million in a combination of an early-stage round in June 2011, a Series A round in July 2011, a personal investment from Goldberg and a $40-million Series B round in December 2011. Goldberg says the most recent round of funding will be used to continue to grow and expand the business.

Fab.com will launch two special shops this month and is "continuing to work on new developments that intersect social, commerce and content," according to Goldberg.

ABOUT THE AUTHOR

In addition to ClickZ and Search Engine Watch, Lisa's work has appeared in The Huffington Post, The Luxury Spot, LearnVest, MarthaStewart.com, GoodHousekeeping.com, amNewYork, and The Wall Street Journal. She's a graduate of Columbia's School of Journalism.

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